Feds investigating payments to Silver

Focus is money from a NYC real estate tax law firm

New York Times

Published 11:08 pm, Monday, December 29, 2014

Photo: Mike Groll

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FILE--In this April 16, 2013 file photo, Assembly Speaker Sheldon Silver, D-Manhattan, speaks during a news conference on publicly financed campaigns in Albany, N.Y. Silver says confidential settlements of sexual harassment complaints by young female staff against a legislative colleague were intended to protect the victims. Responding to special prosecutor Daniel Donovan's conclusion that the Assembly was trying to protect itself with the secrecy, Silver says his actions "represented a good faith belief that the Assembly was acting in the interests of the victims." (AP Photo/Mike Groll, File) less

Federal authorities are investigating "substantial" payments made to Assembly Speaker Sheldon Silver by a small law firm that seeks real estate tax reductions for commercial and residential properties in New York City, according to people with knowledge of the matter.

Prosecutors from the U.S. attorney's office in Manhattan and agents of the FBI have found that the law firm, Goldberg & Iryami PC, has paid Silver the sums over roughly a decade but that he did not list that income on his financial disclosure forms, the people said.

The prosecutors, from the office of Preet Bharara, U.S. attorney for the Southern District of New York, and the FBI agents were seeking to determine precisely what Silver has been doing for the payments, the people said. Spokesmen for the FBI and Bharara's office declined to comment.

Part-time work by legislators has long been a focus of federal investigators because corrupt lawmakers have used payments for ostensible part-time jobs or consulting work to mask political payoffs. It also has been a source of concern among government watchdog groups because of the potential for conflicts of interest.

The investigation into the Goldberg firm's payments to Silver grew out of the work of the Moreland Commission, an anti-corruption panel created in 2013 and then abruptly shut down by Gov. Andrew Cuomo. The commission's investigation into lawmakers' outside income was stymied when the legislators and their employers challenged the subpoenas in court.

Silver, a Manhattan Democrat who has wielded enormous influence in the capital for the two decades in which he has served as Assembly speaker, is a personal injury lawyer. He is not known to have any expertise in the complex and highly specialized area of the law in which Goldberg & Iryami practices, known as tax certiorari, which involves challenging real estate tax assessments and seeking reductions from municipalities.

Silver has long listed the personal injury firm of Weitz & Luxenberg on his financial disclosure forms. Still, almost nothing is known about the work he did for the firm during those years. State ethics laws do not require him to provide any details about what he does, who his clients are or even if he has any clients at all.

Public records contain no indication that he has ever appeared on behalf of clients in state or federal court. He has for years steadfastly refused to discuss his work or his clients in anything but the most general terms.

The people with knowledge of the matter, who spoke on the condition of anonymity because the investigation was continuing, would not say how much Goldberg & Iryami, and a predecessor firm, Jay Arthur Goldberg PC, had paid Silver in roughly a decade, with one characterizing it only as "substantial."

Silver did not respond to questions about the investigation or his relationship with the Goldberg firm, including how much the firm has paid him, when the payments began, what work he has performed, or whether he has any tax certiorari experience. In the past, he has maintained that he has properly disclosed all of his law firm income.

Silver was the subject of two separate unrelated federal investigations in the last few years, according to several people with knowledge of those inquiries.

One focused on loans Silver had made to a litigation funding company called Counsel Financial, which is related to Weitz & Luxenberg. The other focused on a lobbyist with a decade-long relationship to Silver.

Neither resulted in criminal charges.

Goldberg & Iryami appears to have just two lawyers. It operates out of a small office at 42 Broadway near Bowling Green, a somewhat run-down building that houses a number of city offices. It is run by Jay Arthur Goldberg, 75, who served on New York City's Tax Commission during the Edward I. Koch administration, from 1978 to 1986.

Goldberg has also been an occasional supporter of Silver's campaigns. Since 2001, he and his law practice have made six donations to Silver, totaling $7,600, according to campaign finance records. The most recent contribution was in February, when Goldberg & Iryami gave him $1,800.

Silver declined to say how the relationship with Goldberg developed. Goldberg, in a brief telephone conversation, referred questions about the investigation to his lawyer, Michael S. Ross, who declined to comment.

In recent years, Goldberg and his firm have represented hundreds of properties across the five boroughs, from modest storefronts on Staten Island to office buildings in Manhattan, according to court filings and records from the city's Tax Commission. He has also represented several large cooperative developments on the Lower East Side, the neighborhood that makes up the heart of Silver's political base.

The sizable number of properties on the Lower East Side for which Goldberg has sought real estate tax reductions include Silver's own co-op, the Hillman Housing Corp., a large development of brick apartment buildings on Grand Street, tax records show, as well as the commercial building across the street that is listed in state records as the address for Silver's campaign committee, Friends of Silver.